Page last updated at 12:54 GMT, Saturday, 22 August 2009 13:54 UK

Oil diplomacy in Megrahi release?

Libyan suggestions that the UK released convicted Lockerbie bomber Abdelbaset Ali al-Megrahi in exchange for trade considerations has raised the spectre of Tripoli engaging in oil diplomacy, says the BBC's Rana Jawad, in the Libyan capital.

The Libyan leader (L) welcomes freed Lockerbie bomber al-Megrahi (R)
Megrahi is the only person convicted over the Lockerbie attack

Even as the British Foreign Office denied the claims, Libyan leader Muammar Gaddafi was hinting at the same allegation made by his son, Seif al-Islam, hours earlier.

"This step [Megrahi's release] is for the benefit of relations between Britain and Libya, and relations of personal friendship between me and them, and it will certainly be positively reflected in all fields of co-operation between the two countries," Col Gaddafi is reported to have said during his first meeting with the convicted Lockerbie bomber.

The UK government has vigorously denied that any under-the-table dealings were struck to secure Megrahi's release from jail on compassionate grounds.

However, this will do little to ease suspicions among its critics among the UK and US public that a deal was struck behind closed doors.

A first red flag for the families of Lockerbie's 270 victims was raised earlier this year with the ratification of the prisoner transfer agreement between the British and Libyan governments.

Some observers saw it as being rushed through parliament for ratification with no proper review.

Oil muscles

The festive welcome given to Megrahi at the Tripoli airport has triggered an angry war of words. Claims and counter-claims have ping-ponged between the US, the UK and Libya.

But indulging in wordplay may not be in the best interests of the western countries right now. Libya has proven in recent years that it can and will flex its "oil muscle" when the occasion arises.

A Libyan driver holds a placard of Lockerbie bomber Abdelbaset Ali al-Megrahi, 20 August
Megrahi received an enthusiastic welcome on Thursday

On the day of Megrahi's return to Libya, Swiss President Hans-Rudolf Merz was in Tripoli apologising publicly to the Libyan people in a news conference.

The move stunned his people back home; but it seemed clear that Switzerland saw no other way out of a year-long diplomatic spat with Libya.

In 2008, Col Gaddafi's son Hannibal and his wife were arrested and detained by Swiss police for allegedly beating two of their servants.

The move infuriated the Libyan government and it was not long before Swiss companies and nationals were driven out of the country and the oil taps were half shut.

Many Libyans accuse the complaining American and British politicians of disingenuous posturing, saying that it was pretty obvious what would happen in the event of Megrahi's release.

But nevertheless a lot of questions are being asked about the potentially damaging fall-out over the freshly-released Lockerbie bomber.

Despite the rhetoric on all sides, however, it still seems like an unlikely scenario.

America and Britain see Libya as a strategic partner in the region for both its natural resources and its geographical location.

The Libyans are also aware that there is no turning back from the road to reform they embarked on five years ago - and they recognise their need for major western powers to help them along the way.

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